CBA produces record half-year profit

Updated
February 13, 2013 19:17:00

The Commonwealth Bank has produced a record half-year profit, but it claims it's still being squeezed by higher funding costs as the competition for deposits intensifies. Meanwhile the share market has closed above the psychologically important 5000 points level for the first time since April 2011.

TIM PALMER: David joins me now to look at what else is happening in finance. The Commonwealth Bank produced another record profit.

DAVID TAYLOR: Tim, strong growth by the Commonwealth Bank's retail business has helped underpin a net profit of $3.6 billion in the six months to December. Now the first half result was up 1 per cent last year, broadly in line with analysts' expectations. The bank's preferred measure, cash earning, rose by 6 per cent to $3.7 billion and that's a record for the half year.

The Commonwealth Bank has increased its interim dividend by 20 per cent, to $1.64 per share and that's fully franked. The bank says it's still being squeezed by funding costs. Of course, competition for deposits is driving up their funding costs, but they're making a record profit and they're still complaining.

Commonwealth up 2.5 per cent to $67.11. Of course, that lifted the broader market. Banks and miners both led the market higher - the All Ords closed up 43 points, or 0.8 per cent, to 5,024. That's the highest the All Ords has closed since April 2011.

Gold's remaining under USD$1650 an ounce at 1648, and the Australian dollar's crept a little higher in today's Asian trade. It's now 103.5 US cents.